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WiFi Sense connects you to WiFi networks around you. It can do these things for you to get you Internet access:
Automatically connect you to open WiFi networks it knows about by crowdsourcing networks that other people using Windows have connected to. These are typically open WiFi hotspots that you see when you’re out and about.

Update (May 18, 2016): Microsoft has disabled its controversial Wi–Fi Sense feature, a component embedded in Windows 10 devices that shares access to Wi-Fi networks to which you connect with any contacts you may have listed in Outlook and Skype — and, with an opt-in — your Facebook friends.

Automatically connect you to WiFi networks that your Facebook friends, Outlook contacts, or Skype contacts have shared with you after you’ve shared at least one network with your contacts. When you and your contacts share WiFi networks with each other, you give each other Internet access, but you don’t see each other’s passwords. No networks are shared automatically. When you first connect to a network that you decide to share, you’ll need to enter the password, then select the Share network with my contacts tick box to share that network.

That sounds great! So what is the problem? Well, as always, MS does not explicitly ask you before turning ON such a crucial feature – assuming you used the Express settings. It’s just ON by default.

Thing is, these are very new software features and are yet to be time-tested. It’s the kind of feature which if has a hidden flaw a hacker could exploit, could lead to disasters. Even if Microsoft has taken measures to encrypt the exchange of credentials, there’s always the potential for motivated crackers to find ways to circumvent the security protocols. And keeping features that has access to critical things like your Wi-Fi credentials ON by default, not a fan of that at all!

After all, how difficult is it to just share the pass-phrase with friends and family?

I should clarify that even though, the feature is on by default, as per the FAQ, MS does not store the password to a Wi-Fi network on their servers until the user decides to share that network. Personally though, I don’t think I will ever use it. If I can help it, I would never be down with storing my network password on some server somewhere – no matter how safe they promise to keep it. I would rather make visitors use the guest mode on my router so that I can keep my private network isolated.